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Best Starter Credit Card

Live Your Best Life: Start Building Credit Now

Disclosure: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities. The product details on this page have not been reviewed or provided by the bank advertiser.

If you’re like most people, credit cards are a mystery. Between all the fine print, variable interest rates (what does variable even mean?!), and endless card options, it’s easy to get overwhelmed.

But if there’s one thing you need to know, it’s this: It’s hard to build a future without a credit card.

For most newbies, it’s tough to build this intangible thing — especially since a lot of credit card companies won’t approve people without credit history. According to Discover, one of the top reasons for credit card application denials is lack of credit history.

There’s also a lot of misinformation on how to responsibly use starter credit cards. According to Experian, 76% of millennials consider themselves knowledgeable about credit, but almost half only make the minimum payment — which can lead down a deep, dark path of debt. So, let us shine some light — we debunk four common myths and share how you can champion a stellar credit history, stat.

MYTH: Starter credit cards are a gateway to debt.

FACT: The truth is a credit card used the right way can help you build good credit history, which you’ll need to get approved for better car, home, or student loans. In fact, consumers with poor or no credit can pay auto loan rates that are three-to-four times higher than those with good credit scores, according to BankRate. Ouch. Thanks to a TD Bank survey published on Consumer Affairs, we also know 25% of millennials don't know their credit score, which is key to negotiating better interest rates and better rewards. Double ouch

MYTH: Those outrageous annual fees add up.

FACT: Some starter cards, like the Capital One® Platinum Credit Card, have no annual fees. Just keep in mind that if you carry a balance, there are interest charges for most credit cards, which can be variable APR between 10% and 30% or more. But as long as you pay your full balance every month, you won’t pay any extra.

MYTH: Credit card companies want you to irresponsibly spend.

FACT: Crunching numbers isn’t the most fun thing to do. Some credit card services include free easy-to-use budgeting tools and financial planning tools.

MYTH: Starter cards provide no incentives.

FACT: Rewards are a big perk. If you are a college student, with the Discover it® Student Cash Back card, for instance, you’ll earn 5% cash back in rotating categories like gas and restaurants, and 1% cash back on purchases most other purchases. Now, this doesn’t mean you should go on a shopping spree. Spend only what you can afford. And be sure to pay off the full balance on time every month.

The sooner you start building credit, the closer you’ll be to being able to secure that future SUV, home, office space, or whatever it is you’re planning for. We urge you to do your homework on starter credit cards, but the responsible spending on credit cards debunk all the common misconceptions above and offers even more.

Want more credit card and smart shopping advice? Download Honey for free — and catch Honey Tips while you browse.